(Newser)
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Investors sent bank stocks plunging yesterday, as they finally started to worry about the mortgage robo-signing scandal. Up until now, investors have mostly assumed the crisis would blow over. But on Wednesday, 50 states announced investigations into mortgage servicing practices, and yesterday a San Francisco hedge fund circulated a report predicting that the crisis would wind up costing Bank of America a whopping $70 billion, the New York Times reports.

As a result, Bank of America fell 5.2%, its biggest drop since mid-July, Wells Fargo fell 4% and JP Morgan fell 2.8%, despite a relatively flat stock market, according to the Wall Street Journal. “I don’t see how it can be cleared up in a short period of time,” said one analyst. “The moratorium won’t last that long, but the problem will last four or five years, maybe a decade.”

It amazes me that conservatives still howl with fury when rational people suggest that bank executives are paid too much. They'd much rather point their finger at the teacher making $30,000/year while dodging bullets.

Illuminated_One

Oct 15, 2010 8:38 AM CDT

When are bank executives going to be held responsible for the horrendous job they done as stewards of the assets and equity of bank shareholders? Why aren't bank boards of directors under more scrutiny for allowing the executives to squander assets and equity? Why are the executives still paid outrageous salaries and bonuses? Everyone is down on government representatives as wasters of taxpayer money. We are told to vote the bums out. Why isn't there the same furor over the bank executives and other corporate leaders? I like a free market as much as the next guy but when executives take it to mean free to f*ck everyone else and take what they can for themselves I begin to lose faith in our system.